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The Bill of Rights to the united states constitution guarantees certain individual freedoms, such as freedom of speech and freedom of religion which underlie the American free enterprise system.

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What is the behavioral assumption of the modern financial-economic theory?

The behavioral assumption of the modern financial-economic theory runs counter to the ideas of trustworthiness, loyalty, fidelity, stewardship, and concern for others that underlie the traditional principal-agent relationship.


What assumptions underlie the theories of specialization in international trade?

1. Full employment 2. Economic efficiency 3. Divisions of gains. 4. Two countries, Two commodities 5.Transport costs 6. Statics and dyamics. 7. Services. 8. Production networks. 9.Mobility


What are the objectives of business policy?

1. A specific result that a person or system aims to achieve within a time frame and with available resources. In general, objectives are more specific and easier to measure than goals. Objectives are basic tools that underlie all planning and strategic activities. They serve as the basis for creating policy and evaluating performance. Some examples of business objectives include minimizing expenses, expanding internationally, or making a profit. 2. Neutral (bias free), relating to, or based on verifiable evidence or facts instead of on attitude, belief, or opinion. Opposite of subjective.


What ate the assumptions that underlie the classical model of decision-making?

The classical model of decision-making is based on several key assumptions: first, it assumes that decision-makers have access to complete and perfect information, allowing them to evaluate all possible alternatives. Second, it presumes that individuals are rational and will always choose the option that maximizes utility or benefits. Third, the model assumes that preferences are consistent and can be ordered, meaning that decision-makers can rank their options clearly. Lastly, it suggests that the decision-making process is linear and systematic, leading to optimal outcomes.


Factors influencing consumption function?

Factors determining consumption function Broadly speaking, there are two factors, which influence consumption function in the long run. They are 1. Subjective Factors.2. Objective factors. 1. Subjective factors:Subjective factors basically underlie and determine the form of the consumption; the subjective factors are internal or endogenous in nature. They mainly depend upon the personal decisions taken by the people. Keynes has listed eight main motives, which compel people to refrain from current spending. They are the motives of precaution, foresight, calculation, improvement, independence, enterprise, pride and avarice. In addition to these factors, he has also added a list of motives, which leads to consumption. "We could also draw up a corresponding list of motives to consumption such as enjoyment, short sightedness, generosity, miscalculation, ostentation and extravagance" Keynes. II. Objective factors Objective factors are those, which depends on merits and facts. In this case personal factors will not come into picture. The following are some of the important objective factors, which influence consumption. 1. Distribution of national income, 2. Fiscal Policy, 3. Money income, 4. Real income, 5. Price and wage level, 6.Changes in tastes and fashion, 7. Changes in expectations, 8. Windfall (Sudden) gains and losses, 9. The level of consumer Indebtedness, 10.Attitude towards thrift 11.Liquid assets, 12. Social and life insurances, 13. Rate of interest, 14. Business policies of corporations, 15 demonstration effect, 16. Changes in expectations, and 17 Installment buying, etc. The objective factors generally remain unchanged in the short period. Thus, propensity to consume in the short period is generally stable. It is because of this, Keynes places his reliance on investment for the purpose of increasing employment during depression.

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